March 24, 2022 Industry news
The new rules, set to restrict the promotion of all food and drink products high in fat, sugar or salt (HFSS) from October 2022, will cause meaningful disruption to the FMCG market.
As a result, GS1 UK has joined forces with leading retailers to develop an extension of our productDNA platform to help businesses adapt and future-proof their processes.
Following on from our first webinar exploring the fundamentals of HFSS, part two explored:
- The impact of HFSS
- Why retailers have collaborated to offer and industry solution
- What actions you need to take
Far reaching impact
To explain the need for an industry wide HFSS solution, Dan began by providing and overview of the challenges currently facing businesses.
One of greatest sources of disruption is the transitional stage the HFSS legislation requires. Both brands and retailers must dedicate significant amounts of time and resource to simply familiarising themselves with the new rules.
This is further complicated by the fact that there are still grey areas that the government is yet to provide clarification on.
Both sides must also undertake vast product assessment exercises. Using the Nutrient Profile Score system covered in our last webinar, manufacturers must analyse their range to see if and how they are affected while retailers need to get an accurate picture how many HFSS products they stock, and what those products are. The Government’s impact assessment report estimated that HFSS product assessment could cost the industry more than £3.1 million.
This transitional stage also requires communication. Businesses need to educate their staff and ensure the flow of product from manufacture down to store level. The new restrictions on in tore and volume-based promotions will also have a major commercial impact. The EHI Retail Institute recently found that while checkout areas account for just 1 per cent of sale space, they deliver up to 7 per cent of total sales while aisle-ends account for over 20 per cent.
With 43 per cent of sugary food and drink currently displayed in prime locations, a figure which increases dramatically when factoring in salt and fat, there will be a high volume of products moving around stores. This is bound to have a significant impact on shopper behaviours, 50 per cent of whom buy HFSS products regularly. Our research has also found that 66 per cent of consumers claim that the positioning of products impacts their decision to purchase, 53 perc ent would miss volume promotions on HFSS goods, and one quarter would buy less if only available at full price. As well as the impact on store plans and purchasing patterns, HFSS will have a dramatic impact on the products themselves. 48 per cent of brands are already reformulating products and 35 per cent plan to do so in the coming months, generating even more product data requirements.
Why are retailers collaborating on an industry solution?
Any manufacturer who secures a listing with a retailer will be asked to fill out a new lines form. This time-consuming process can be made even more challenging if different retailers request the same data in different ways. Without standardisation, this process is arduous, long, and difficult and often results in retailers receiving data that is inaccurate or contains gaps.
So, rather than building HFSS in to existing, inefficient systems, industry has recognised the need to come together to make it easier for manufacturers to share product information. This becomes increasingly important when there are liabilities on the retailer side, as ensuring compliance is highly dependent on accurate timely information from suppliers.
With collaboration at the heart of everything we do, GS1 UK, along with the Institute of Grocery Distributors (IGD), spoke to members when the legislation was first announced.
Many concerns were raised. Chief among them were the limited time frame to adapt and ensure compliance, that a lack of clarity and consistency could result in confusion, missed deadlines and poor-quality data, and the need to support and educate SMEs who may not have the necessary expertise or resource in-house.
Taking an industry wide approach to this challenge allowed all parties to agree exactly what HFSS data was required, what those attributes would be called and how they should be supplied. This improves data quality, boosts operational efficiencies, reduces costs, and meets growing customer demand for nutritional information.
Now aligned to 75 per cent of the grocery retail market’s chosen long-term approach to product data, productDNA for HFSS is future proofed, laying the foundations to tackle future legislation in a collaborative manner. With industry utilising the same approach, the risk of non-compliance is minimised and, thanks to GS1 UK’s position as a not-for-profit membership organisation, our solution is available to all members at no additional cost.
Over 10,000 products are entered into the platform each week, showing the impact of collaboration on speed and accuracy and we are actively working with community partners such as Young Foodies to provide SMEs with additional support.
What actions do you need to take?
The first step towards getting HFSS compliant is simply visiting our HFSS solution page and clicking the link to register. You will then be directed to a form asking you the relevant details about your business.
Once you have registered, you will receive an email with your log in details and next steps.
If you are unsure of anything, the page is packed with useful resources including guidance on HFSS requirements, training materials, support details and our downloadable excel template.
Q&A
As with our first HFSS webinar, attendees submitted some great questions during the Q&A, including:
We have tried to provide as much commonality as we can across our retail group but advise you to submit your data as soon as possible to cover yourselves across all multiple retailers.
Yes, even if you are aware of the NPS score the retailers are not and will require this information. As covered in our last session, the legislation currently covers thirteen categories, but many retailers are requesting HFSS attributes for all food or drink products. We would advise entering attributes for all products regardless of their NPS score or category as, with health and well-being high on the agenda for retailers, consumers, and the government, this will help you prepare for any future requirements.
We are still waiting for final government guidance so, at present, all we can suggest is check the advice that is currently available and speak to your retailers to get their take on it. Even if you think you fall outside of the thirteen categories, it is still worth entering your data into productDNA.
If you have received communication from your retailer asking you to take this approach, we advise you to do so. Some retailers have asked for HFSS information previously to get ahead on planning but productDNA is rapidly gaining traction as their long-term solution for product data. If you have sourced and shared this information already, you should upload it to productDNA.
No, NPS is the current focus of retailers. Mandatory attributes are highlighted in our excel template and while the additional attributes are optional, most retailers expect them. Our advice is to complete template in full.
Trading standards within local authorities will be checking stores for compliance. If they find a breach they will issue, and improvement notice and work with retailers before issuing any fines or penalties.
See our HFSS resources, speak to retailers and keep a lookout for any additional guidance from government.
Yes, until you make and conscious product-by-product decision on what you share with each retailer, only you can access your product data. Only the retailers you select will have access and no information will be visible to other brands or competitors.
We are actively engaging with the retail community to get as many as possible to take this approach. We believe productDNA is the right route for industry, for meeting both the challenges presented by HFSS and any future legislation.
You should aim to keep your data up to date and add any new products into productDNA. If there are changes to a product, you should also update any relevant data you store on the platform and share those updates with your retailer as this will enable them to take appropriate actions.
We are currently planning workshops to develop guidance on reformulation. We will share advice on when to use a new Global Trade Item Number (GTIN), newlines etc. once the industry has come to agreement on the best course of action.
Uploading can be done iteratively. You can add ten products one day and 50 another, or you could submit the mandatory fields and update the nutritional fields later. If you do not have all the necessary data available, we would advise submitting your data iteratively.
There is a fee for retailers depending on their size and turnover. We have made our solution free to all suppliers to help SME community and increase the speed of adoption. GS1 UK is not-for profit so retailer fees are minimal to fund development.
If the product falls under food and drink, we advise you too still calculate the NPS and upload to productDNA.
Watch our HFSS basics webinar
If you missed our webinar on HFSS: everything you need to know about the upcoming legislation, you can watch the full recording here.
Watch our webinar on how the industry is solving the HFSS dilemma
If you missed our webinar on how industry have collaborated to provide a HFSS solution, you can watch the full recording here.
Are you prepared for HFSS?
With the HFSS deadline rapidly approaching, we surveyed business owners and consumers across the UK to measure their awareness, readiness and attitudes towards the new legislation.